Unfortunately I don't think the tax set-aside is cash, I think it is just a provision within the accounts that has had a -ve effect on NAV but which will have been removed in the next set of accounts

The free assets are the cash of 49m+13m debt free property+31m of equity in the silo with only 50% mortgages. This is safe assets totalling 93m = 0.15 per share i.e. more than the current share price.

Then there is a further 214m of net equity in the other silos, which at over 80% loan to value are in breach of banking covenants. Most of these have been in breach since 2009.

We have been through some really bad times, commercial property prices got hammered as investors bailed out and forced funds to sell properties in a hurry. Since then the market has recovered and is on the up.

My take on this is that if they wanted to seize the properties and have a fire sale, the covenant breaches would have allowed the banks to do this a few years ago. Hence there is no reason why this should suddenly happen in July 2011 when debt is due to mature ? If you were the bank, your loan is performing, and your interest rate is probably higher than you could re-lend it to someone else in the current environment, the value of your security is rising ( as evidenced by recent sales) wouldn't you roll over the debt into a new longer term facility ? I would expect that Treveria will have to sell a few more properties in order to bring LTV down to 75% but that should be about it.

The equity in these properties is worth an extra 0.35 per share i.e. >250% upside to the current price.

I agree that there is still risk but the current price is backed by assets and I think the upside is well worth it.

I would expect any kind of good news about new bank facilities in the next few months to project this share upwards pretty swiftly.

I think of it as having 2 navs - one is the 49m E cash plus the 40m E set aside as a contingent liability for the tax thing plus 13m E no mortgage property in silo J = 102m E pretty much for sure.

Then there is the slightly less certain you're gonna get the money one that includes the above plus the mortgaged properties (on mortgages that run out soon and may not be renewed without dilution or destruction of the value there). And that one is 340m E.

Given investors aren't actually going to get their hands on the 102m E for a while even if everything goes right I think it's now a pretty fair price, no?

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